What Is the Average Car Accident Settlement Amount?

March 6 2023

The exact amount of your car accident settlement depends on numerous factors, such as the severity of your injuries and the liable party’s insurance coverage. Generally, you may expect to receive several times more than what was originally offered by the insurance company.

What is a Car Accident Settlement?

In a car accident settlement, both parties involved in the accident agree to a mutually beneficial resolution that compensates for damages to property, loss of income, and injury or death incurred. Rarely does one party accept full responsibility for the accident by admitting fault; rather, a settlement is an out-of-court agreement that typically involves a payment of money to one or both parties involved.

There are pros and cons to settling an auto accident out of court. On one hand, the process can be highly emotional and complex, so avoiding the courtroom helps to provide some resolution without having to endure this stress. It also preserves any privacy issues that may exist, as most case settlements dispense with public record. On the other hand, deciding on a settlement amount can be difficult due to lack of clarity regarding fault, as well as liability insurance limits that might not sufficiently cover all losses incurred. Additionally, defendants may feel compelled to settle in order to avoid lengthy court proceedings if seeking a prolonged dispute could be cost-prohibitive or simply too time consuming.

By negotiating a financial damage award resolution agreeable to both parties, the chances are improved for both sides receiving a desired outcome from their perspective. Ultimately, this can be much faster than going through lengthy court proceedings as well as more financially beneficial since court and attorney fees must necessarily be taken into consideration.

Before proceeding with negotiations for a car accident settlement, it’s important to ensure all damage awards accurately reflect each party’s true losses after factoring in collateral payments; this will guarantee that everyone gets what they deserve without creating further hardship on any individual involved. Following the negotiation process comes the critical next step: formalizing The Process of Negotiating a Settlement.

  • According to the Insurance Information Institute, the average auto liability claim for property damage in 2018 was $3,440.
  • A 2018 survey of auto accident attorneys by NerdWallet found that the median expected settlement of roughly $21,000 is more than three times greater than the average auto property damage claim.
  • A 2017 study published in the British Medical Journal found that for whiplash claims, settlements (which included both economic and noneconomic damages) ranged from a low of $2,751 to a high of $52,114 depending on the nature and severity of the injury.

The Process of Negotiating a Settlement

Negotiating an appropriate car accident settlement amount is often a tricky and sometimes lengthy process. On one hand, the liable party’s insurance company is usually trying to settle for the lowest amount that would cover immediate medical expenses and potential liability claims. On the other hand, the injured party may want a higher settlement account to cover potential long term medical costs or to replace items such as clothing and a vehicle damaged in the crash. Working with an experienced lawyer or negotiator can be of great help in reaching a mutually beneficial agreement.

The negotiation process typically begins with an assessment of the damages incurred by both parties resulting from the accident. This includes determining which party is at fault, considering both economic and non-economic forms of damages, calculating medical care fees, pain & suffering fees, lost wages fees, property damage fees, etc. Once all of these damages have been determined, the negotiation process can begin between the insured’s attorney or negotiated and the responsible party’s insurer.

During negotiations, it’s important for both parties to remain patient and open to offers from each side. In some cases, negotiations can move quickly whereas in others the process may be drawn out due to disputes over liability and damages. An experienced lawyer or negotiator will work hard to ensure a fair outcome is reached between both parties.

Leading into The Next Section:

Once all of the necessary information regarding damages and liability has been gathered, determining an adequate car accident settlement sum becomes possible.

Determining Damages and Liability

The determination of damages and liability in a car accident settlement largely depends on the circumstances of the incident. When determining damages and liability, the insurance adjuster will consider factors such as the severity of the accident itself, the extent of property damage and bodily injury sustained, whether fault can be assigned to either of the drivers involved, and any special considerations.

When it comes to assigning fault in a car accident, some states follow a “contributory negligence” system, which means that injured drivers can still receive compensation even if they are found to be partially responsible for the accident. Other states have adopted a “comparative negligence” approach that assigns a percentage of liability to each driver and reduces the plaintiff’s potential award accordingly. For example, an individual found to be 25 percent at fault for an accident might only receive 75 percent of his or her total damages award.

The process for determining damages and liability can also vary according to state; for example, certain states may prohibit certain types of punitive damages awards due to their perceived unfairness to job applicants. Many states also require that both parties confer with one another in an effort to reach an acceptable settlement amount before going through formal court proceedings. In this process, both parties must prove their case with evidence such as police reports, witness statements, photographic evidence, medical records, and other documentation.

Once fault is determined, a court or insurance adjuster will then decide how much each party is entitled to receive in terms of economic and non-economic damages. Economic damages encompass direct financial losses such as medical expenses (including specialized medical equipment or physical therapy), lost wages due to missed work, loss of future earning capacity due to disability or long-term injury, attorneys’ fees and court costs. Non-economic damages refer to indirect losses incurred by victims such as pain and suffering and emotional trauma caused by the accident.

Negotiations between insurance companies usually begin once all relevant facts have been established and documented during the process of determining damages and liability. The next section will discuss those negotiations in more detail including what needs to be taken into consideration when negotiating a car accident settlement amount between insurance companies.

Negotiations Between Insurance Companies

Negotiations between insurance companies largely depend upon the facts of the case, as well as the policies and coverage held by both parties. Adjusters from each company are responsible for gathering all of the evidence in a car accident case and coming to an agreement on who is liable or at fault and how much money should be paid out in damages. Factors like medical costs, property damage, the severity of the injuries sustained, lost wages, pain and suffering, future care needs, and other potential losses are all taken into consideration during these negotiations.

It is important to remember that every adjuster is working hard to get their insurance company the maximum benefit – so they may not always be willing to pay out a fair settlement amount to you. In some cases, it can be helpful to enlist the help of a personal injury lawyer who can negotiate on your behalf, ensuring that you receive a compensation package that meets your needs. On the other hand, if you choose to work directly with an adjuster from each company, it is important to remain firm but polite when negotiating and to understand what short-term goals are achievable against what long-term ones might need more financial backing.

At times insurers may also enter into mediation or arbitration to come up with a resolution regarding compensation for any car accident related losses. This process involves working through complex negotiations with third party mediators who will attempt to settle disputes between both sides fairly. Here too, a skilled attorney can prove invaluable when negotiating on one’s behalf in order to secure higher settlements.

Ultimately the key to successfully concluding negotiations between insurance companies lies in having comprehensive information about the accident at hand and knowing exactly how much money should be awarded in terms of compensation for any associated loss or injury. With this knowledge, individuals can confidently enter into the negotiation process and work towards achieving satisfactory outcomes for all affected parties.

Moving forward we will discuss how much money is typically awarded as part of a car accident settlement.

How Much is a Typical Car Accident Settlement?

The amount of a typical settlement for a car accident can vary drastically depending on the circumstances of the individual case. In some cases, minor fender-benders may be settled for only a few hundred dollars, while more serious accidents can result in settlements totaling hundreds of thousands or even millions of dollars. Generally, the more serious an accident is and the more severe the injuries that are sustained, the larger the settlement is likely to be. In disputes over minor damage caused by car accidents, both parties may agree to pay their own expenses out of pocket.

However, if one party was injured or there were extensive property damages involved, it is usually best to reach a mutually agreeable settlement through negotiations with insurance companies. Insurance companies typically prefer to settle claims quickly and outside of court in order to avoid paying costly legal fees. When negotiating with an insurance company, it is important to keep in mind that insurance adjusters are trained to minimize settlement amounts. As such, if you have suffered significant loss as a result of an accident and think that your settlement should be higher than what the insurance company has offered you may want to consider seeking legal counsel who can advocate on your behalf.

In some instances, a jury may award significantly more damages than were initially offered by an insurer. Many personal injury attorneys take cases on contingency basis so there is no financial burden for pursuing justice in court. However, if a jury sides with the defendant in a case this does not necessarily mean that the plaintiff will owe any cost associated with a lawsuit since most jurisdictions have laws preventing plaintiffs from having to pay defense costs when their lawsuit fails.

Ultimately, determining how much is a typical car accident settlement involves multiple factors that range from severity of injuries and extent of property damage sustained to legal costs incurred and strength of evidence presented in court or during negotiations with insurers. The next section will further explore all these different factors that can impact a settlement amount.

Factors that Impact a Settlement Amount

The average car accident settlement amount is largely dependent on a variety of factors. These can include the severity of any injuries sustained, property damage, and in some cases, the jurisdiction in which the accident occurred or the type of insurance coverage each party has.

When it comes to determining the severity of any injuries sustained, medical evidence is usually taken into consideration. Sometimes this evidence may come from medical records, such as x-rays or other imaging tests; but often times attorneys will also bring in expert witnesses like doctors and nurses to determine how much compensation should be sought.

Property damage can also greatly influence a car accident settlement value. For instance, if one driver had their vehicle extensively damaged, they may seek full reimbursement of what they paid for repairs and replacement costs. Additionally, if a claimant was injured or experienced mental anguish or loss of earnings due to being unable to work due to their accident, these things could also add to a settlement value.

Furthermore, the jurisdiction in which an accident occurred could potentially affect a settlement amount. In certain states with no fault insurance laws, an at-fault driver may not have to pay out more than his/her policy limits regardless of how much economic loss the other driver experiences. On the other hand, if the case is heard in a state that allows for personal injury awards beyond policy limits, then that may lead to larger settlements for claimants.

Finally, different types of auto insurance coverage could yield different types of settlements as well. For example, a comprehensive policy might cover things like bodily injury and property damage beyond just repair and replacement fees for damages sustained by another driver’s vehicle. Whereas a liability only policy might only cover those sorts of costs associated with repair and replacement fees for damages solely caused by one party’s negligence.

Overall, due to all these factors that impact potential car accident settlements amounts, it’s important for drivers to understand all the relevant factors that come into play when determining an average settlement amount before entering any negotiations. This understanding can help drivers confidently navigate their way towards receiving a fair settlement that adequately compensates them for any losses they’ve experienced due to an auto accident.

With that said, now let’s look at some tips for getting a fair settlement after an auto accident.

Tips for Getting a Fair Settlement

Getting fair compensation for damages received in a car accident should be at the forefront of any injury claim. Understanding the factors involved in obtaining a fair settlement is key to achieving an outcome that provides financial relief and maximizes one’s compensation. Here are some tips to help those who have experienced an automobile crash get a fair settlement amount:

• Take Stock of the Damage: After being involved in a car accident, assess the damages to your vehicle, review medical records, and consider any other losses you may have incurred (e.g., pain and suffering). It’s also important for victims of an auto accident to note if there were any witnesses to confirm what happened as this may be vital evidence during negotiations or litigation.

• Understand Relevant Insurance Policies: Read the fine print of both your own insurance policy and the liable party’s insurance policy. These policies will provide important information about the coverage levels, deductibles, exclusions, etc. Having this knowledge will help you build leverage when negotiating a settlement amount.

• Consider Legal Representation: Consulting with an attorney before beginning negotiations can be invaluable in getting a fair settlement amount. Oftentimes, it takes someone with legal expertise to ensure all of your losses are taken into account. Don’t be afraid to explore several options before deciding which lawyer or law firm best fits your needs.

• Negotiate Thoughtfully: Carefully consider each negotiation offer made by the liable party’s insurer and research related settlements so that you know if their offer is truly fair or not. If you remain steadfast in your demands but show willingness to meet somewhere in the middle, this can work in your favor during negotiations as well. In some cases, it may make sense to file a lawsuit if agreements can’t be reached through negotiation or mediation.

Regardless of whether you decide to hire an attorney or not, having an understanding of how legal processes work and researching related settlements can have a tremendous impact on getting a fair settlement amount after being involved in a car accident. Ultimately, with preparation and strategic negotiation one can stand up for their rights after being injured in such an incident.

The next section will discuss when one should seek legal assistance from a lawyer following an auto accident injury claim.

When to Seek Legal Assistance from a Lawyer

The decision of whether to seek legal assistance from a lawyer is an important one. In most cases, it is advisable to consult a qualified attorney if you have been involved in a car accident, even if you believe that the other party was solely at fault. There are many legal issues, such as liability and damage claims, which can be confusing. An experienced lawyer can help guide you through the process and ensure that your rights are protected and any settlement amount properly assessed.

Having said this, it is not always necessary to hire a lawyer for every accident claim. In some instances, two parties may come to an agreement on their own terms outside of court. This process can be more efficient and cost-effective than involving an attorney or a court case. If the accident was minor and both parties are in agreement on the compensation/repair of damages, then it might be best to handle everything without legal representation.

Ultimately, these decisions must be made on a case-by-case basis. Factors such as the severity of the injury and damage sustained will play into the decision to involve an attorney and pursue a claim through the courts or through an alternative resolution process.

In conclusion, when deciding whether to seek legal assistance from a lawyer after an auto accident, one should prioritize their safety and wellbeing by understanding their rights and any applicable laws regulating motor vehicle accidents. It would also be prudent for victims of automobile collisions to accurately assess the severity of their injuries or vehicle damage before committing to a course of action.

As this article has focused on what is the average car accident settlement amount, the next section will discuss how this can vary depending on several factors including whether legal assistance is sought out or not.


Due to the highly variable nature of car accident settlements, it is difficult to identify an average settlement value. Every legal case is unique and the settlement will depend on the circumstances. Generally speaking, a car accident settlement may take into account the seriousness of injuries, medical costs, loss of wages, pain and suffering, and property damage. It could range anywhere from a few hundred dollars to millions of dollars, depending upon the situation.

In some cases, you may be entitled to additional damages such as punitive damages. Punitive damages are meant to serve as punishment for gross negligence or malicious behavior rather than compensation for injury. In any legal case where punitive damages are applicable there is a good chance that the settlement amount will be higher than an average settlement amount since these awards tend to be more substantial.

Though settlements can vary greatly in size, the process remains largely unchanged – both parties must come to an agreement about how much money should be paid out as compensation for injury or damage. Mediation is often used to reach an acceptable sum and can help to reduce the animosity between parties while expediting the process and potentially forming a better outcome for all involved.

At the end of the day, it’s important to remember that each car accident claim is unique; what this means is that there is no single “average” car accident settlement amount that applies across all cases. The best way for anyone involved in a car accident claim to determine what their potential payout could be is to consult with an experienced attorney who can review their specific situation and help calculate an appropriate figure accordingly.

Common Questions and Responses

What factors determine the amount of a car accident settlement?

The amount of a car accident settlement is primarily determined by the severity of the injuries sustained. Factors such as medical bills, lost wages, pain and suffering, and permanent disability can all affect the total cost of the settlement. Additionally, if either party is found to be at fault in an accident, they are usually liable for damages. The insurance policies available to both parties may also determine the size of the settlement. For example, if one driver has lower liability coverage than the other, then the size of their settlement might be reduced to reflect this. Ultimately, car accident settlements are determined on a case-by-case basis after considering a variety of factors.

Does insurance usually cover all of the costs associated with a car accident settlement?

Generally speaking, insurance will cover the majority of the costs associated with a car accident settlement. Depending on who is found to be at fault for the accident, either your own insurance provider or the other drivers’ will often be responsible for paying the damages incurred by the victim. This might include medical bills for those injured in the accident, costs for car repairs, and lost wages due to time away from work. If any party involved is uninsured or underinsured, then additional funds may need to be paid out of pocket to cover the costs of the claim. Ultimately, every situation is unique and it’s highly recommended to speak with a qualified legal professional to ensure that you are properly compensated and all of your expenses are adequately covered.

How long does it usually take to reach a car accident settlement?

Generally, the amount of time required to reach a car accident settlement depends on multiple factors including the seriousness of the injury, the insurance company’s investigation process and the state laws governing settlements. On average, it can take anywhere from one to two months for an agreement to be reached between all parties. However, more complicated cases may take much longer to resolve.

In some states, statutes of limitations can come into play in addition to other factors that might extend the timeline. A statute of limitations limits the amount of time within which somebody must either pursue or settle a legal claim. Typically, once a claim is filed, negotiations will begin and both parties will work to reach a mutual agreement and sign off on a settlement within six months or less.

Moreover, settlement amounts and lengths of negotiation will vary depending on who is responsible for the damages and how much insurance coverage those parties are carrying. If you are injured in an accident involving another driver who carries insufficient coverage for your damages, then negotiations may take longer as you attempt to negotiate with multiple liable parties.

Ultimately, when it comes to negotiating a car accident settlement, no two cases are necessarily alike and how quickly or thoroughly an agreement is reached can depend on many different factors beyond simply establishing fault or liability.